On July 31, the Department of Commerce Internet Policy Task Force (the Task Force) issued its long-awaited report, Copyright Policy, Creativity, and Innovation in the Digital Economy (the Green Paper), which comprehensively outlines the current major copyright issues, such as digital performance rights, technology protection measures and mass digitization projects, and their relation to the Internet economy. The Green Paper proposes steps that should be taken legislatively, as well as voluntarily via private sector initiatives, to fully utilize the Internet economy while adequately protecting privacy and copyright rights.

The Task Force’s recommendations can be placed in three broad categories, including recommendations to update the balance of rights and exceptions; improving enforcement tools to combat online infringement; and developing the Internet as a legitimate marketplace for copyrighted works and streamlined licensing. Many of the issues discussed and the proposed protections and initiatives may not only be relevant to businesses but may also provide insight into the future of copyright and privacy policies in the transforming digital age.

The issue of fair use is faced by businesses on both sides of this issue. On the one hand, businesses may want to use others’ works when developing marketing materials, slide decks, presentations and other digital or online content. Fair use is also faced by content creators seeking to protect their intellectual property and revenue streams. With the advancement of digital technologies comes the need to create new exceptions to copyright, including updates to the fair use doctrine.

For instance, neither courts nor legislatures have addressed whether the exception applies to allow digital works, paid for in one format or location, to be transformed to another format or location without requiring a second payment. Although the advantages of its flexibility are obvious, whether the fair use doctrine will apply as a defense to use of copyrighted works is a fact-intensive analysis that is entirely unpredictable unless there is established precedent on point.

As such, private and public entity initiatives have made efforts to make this doctrine’s application more predictable over the years through the development of guideline proposals based upon input from copyright holders and consumers. Although a consensus was never reached, the proposals have provided guidance and understanding to particular disciplines. The Green Paper recommends continued private exploration into fair use guideline proposals by seeking outside input, including the creation of an index of major fair use cases to continually update as a helpful resource.

The Green Paper also provides an overview of the existing legal tools for online copyright enforcement. The Joint Strategic Plan, released by the Intellectual Property Enforcement Coordinator in 2010 with its goals of oversight and coordination, highlights the efforts of the United States to advance a coordinated approach to combating online infringement by increasing law enforcement action, supporting voluntary efforts by the private sector and increasing consumer awareness. Additionally, the Department of Justice and the Department of Homeland Security, through investigation by Federal Immigration and Customs Enforcement, have the ability to seize property in connection with copyright infringement, as well as criminally prosecute violators of U.S. copyright laws.

Despite these controversial governmental enforcement mechanisms, there are numerous practical hurdles faced by officials, specifically with enforcement against foreign violators, including the limitations of resources and jurisdictional restrictions prohibiting seizure of foreign domains names involved in Internet piracy. To provide improvement, the Task Force asserted that it is important for the United States continue to work to reduce foreign-based piracy by working to ensure the adequacy and effectiveness of measures against Internet piracy in foreign jurisdictions and by increasing cooperative efforts with foreign law enforcement.

In addition to criminal remedies, copyright owners have an avenue of relief through private civil actions against the direct infringer and those secondarily liable, as well as through actions against third parties to remove the infringing content from the Internet.

Although suits against direct infringers continue to be a source of relief, they tend to fail to provide long-term deterrence, especially in large-scale infringement suits. Additionally, although direct relief against those who provide avenues for others to engage in infringing acts is possible, it is often hard to differentiate between actual infringers and those who allow actual infringement because proof of volition is required. Moreover, many countries’ laws or statutes protect certain online service providers from secondary liability suits unless there are knowingly or intentional violations of copyright laws, thereby providing a disincentive for active policing of online websites and networks by such operators.

The Task Force points out that progress toward curbing online infringement has been made in recent years through stakeholder cooperation and encourages stakeholders to take part in existing initiatives, some of which were created to address P2P file-sharing and websites dedicated to piracy, or to develop others relevant to their own industry sectors.

The recommended initiatives include:

Website blocking: Directing ISPs to block the public’s access to an infringing website.

Content filtering: Directing ISPs to filter content at the network level by screening all incoming network traffic to look for unique identifying marks, which could be assigned to each piece of digital content, to determine whether transmissions are authorized.

“Follow the money” approach: Notifying banks and payment processors of violations. These entities have voluntarily initiated programs under which they crawl the Internet for certain violations of their rules, which include intellectual property rights violations.

The Green Paper concludes by acknowledging that continued input from all stakeholders will be critical to evaluating and refining our national copyright policy. As such, the Task Force will seek further public input on the issues identified in the Green Paper to “determine how the current copyright framework can be improved to serve creators, right holders, service providers, consumers, innovation, and national economic goals.”